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DTN Grain Midday: Mixed Ahead of USDA

Ernst Undesser
By David Fiala DTN Contributing Analyst September 12, 2017

DTN Grain Midday: Mixed Ahead of USDA

©Debra L Ferguson Stock Images

Mixed action ahead of the report.

CORN

Corn trade is 5 cents lower at midday ahead of the USDA monthly report. We will trade the report, then focus on harvest progress and results. The weekly crop conditions had corn conditions steady at 61% good to excellent which the market viewed as negative versus seasonal declines. Progress listed 96% of the crop in dough, 1 percentage point below average, 75% dented, 6 percentage points below average, 21% mature, 10% below average, and 5% harvested, 1 percentage point below average.

At 11am we will see the monthly USDA September World Agricultural Supply and Demand (WASDE) numbers. The trade is looking for the 2017 production number to be at 14 billion bushels versus the 14.15 billion bushel August number; the range of estiamtes is 13.821 billion to 14.195.

The average yield estimate is at 167.8 bushels per acre versus the 169.5 August USDA number; the range is 165.5-170. The 2017-18 ending stocks estimate is at 2.133 billion bushels with a range of 1.898 to 2.323 billion. The world new crop stocks are expected to be at 198.2 million metric ton versus 200.9 on the August report.

On the December chart support is at the $3.44 1/4 low. The 20-day at $3.57 is noted chart resistance.

SOYBEANS

Soybean trade is narrowly mixed at midday with quiet action ahead of the report. Meal and oil is narrowly mixed as well. Dry conditions continue to be a light concern for late group beans but warmer dryer conditions are also okay for maturity. The weekly crop numbers had ratings down 1% at 60% good to excellent. Progress was noted at 22% of the crop dropping leaves, 3% below average.

The trade is looking for a lower USDA 2017 production number down to 4.321 billion bushels versus the 4.381 billion bushel August number using a 48.7 yield versus the August USDA 49.4 number. The yield estimate range is 47.1-49.8 bushels per acre.

The average 2017-18 carryover estimate is 437 million bushels with a range of 325-540 million. The global carryover is expected to be at 97.3 million metric tons versus 97.8 on the August report. The USDA announced 132,000 metric tons sold to unknown.

On the November chart support is the 10-day moving average at $9.53 with the 200-day at $9.81 major resistance.

WHEAT

Wheat trade is mixed at midday with trade seeing light two sided trade. The dollar has moved off the recent lows, and is trying to establish an uptrend this week. Basis has started to move higher for the high protein wheat again. The weekly crop progress had 95% of spring wheat cut, 8% above average, and winter wheat 5% planted, 1 percentage point below average.

The biggest item to watch on the WASDE report will be a spring wheat production adjustment, especially on harvested acres. The average trade guess for the domestic carryover is 920 million bushels versus 933 on the August report. The world ending stocks are expected to be at 263.9 million metric tons versus 264.7 on the August report.

On the December Kansas City contract support is at the $4.20 low resistance is the 20-day at $4.38.

General Comments

The U.S. stock market indices are higher with the Dow futures up 60 points. The interest rate products are lower. The dollar index is 4 higher. Energies are mixed with crude up 0.10. Livestock trade is lower. Precious metals are lower with gold down $4.20.

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Ernst Undesser
By David Fiala DTN Contributing Analyst September 12, 2017